Offsets in Defense Trade. Fifth Annual Report to Congress
Annual rept. no. 5
DEPARTMENT OF COMMERCE WASHINGTON DC BUREAU OF EXPORT ADMINISTRATION
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The U.S. Department of Commerce, Bureau of Export Administration BXA, Office of Strategic Industries Economic Security is responsible for assessing the impact of offsets in defense trade on the United States under the authority of Section 309 of the Defense Production Act of 1950, as amended. This report covers the six-year period from 1993 through 1998. In defense trade, offsets are industrial compensation practices required as a condition of purchase in either government-to-government or commercial sales of defense articles andor defense services as specified in the International Traffic in Arms Regulations. Offset agreements are commercial contracts between a defense firm and a foreign government. Companies fulfill their offset obligations over a period of time specified in the offset agreement through a series of offset transactions. Transactions are the actual compensation towards the outstanding balance of an existing offset agreement. Over 120 countries currently require offsets of some sort. Recently, a number of countries have implemented new, formal offset polices, including Brazil, the Czech Republic and Poland other countries have increased already established offset percentage requirements.
- Economics and Cost Analysis